The price of ethylene oxide was strong in March

According to data from Business News Agency, on March 29, 2023, the average spot market price of ethylene oxide in China was 7200 yuan/ton, up 2.86% from the beginning of the month; Compared to the beginning of the year, the price was 6800 yuan/ton, up 5.88%.

Overview of ethylene oxide industry chain

The terminal demand has improved, and the price of the main downstream polycarboxylic acid water reducing agent monomer has rebounded. On the one hand, after the holiday, the resumption of production and construction of terminal real estate has started, and the production enthusiasm of polycarboxylic acid water reducing agent monomer enterprises has increased, increasing the demand for ethylene oxide.

Aftermarket Forecast

The price of raw material ethylene is relatively strong, with strong cost support for ethylene oxide currently; The main downstream polycarboxylic acid water reducing agent monomer market is improving, and the demand for ethylene oxide is expected to improve. It is expected that the price of ethylene oxide will continue the current trend in the short term, with strong fluctuations operating mainly.

According to the monitoring of Business News Agency, as of March 28, the average market price of local refining petroleum coke was 2039.00 yuan/ton, down 5.23% compared to the previous trading day and 58.60% year-on-year. Since February, the local refining petroleum coke market has continued to fluctuate and decline, with a decline of over 40%.

The petroleum coke commodity index on March 28 was 158.59, down 8.75 points from yesterday, down 61.20% from the cycle’s highest point of 408.70 points (2022-05-11), and up 137.09% from the lowest point of 66.89 points on March 28, 2016. (Note: The cycle refers to September 30, 2012 to now)

Supply side: high inventory of petroleum coke in port, oversupply in domestic market

The storage of petroleum coke in domestic ports is at a high level, and port traders are actively selling imported petroleum coke to recover funds. However, recently, imported petroleum coke has gradually arrived and warehoused in ports, making it difficult to change the high storage trend of petroleum coke in ports. The operating rate of delayed coking units in China is basically stable, and the market supply is sufficient. Local refining enterprises actively arrange inventory, with poor delivery and investment. Currently, the petroleum coke market is in a situation of oversupply.

Demand side: terminal market is light and demand is limited

In 2023, the downstream metal silicon spot market continued to decline, resulting in light market transactions, a comprehensive loss for Southwest Silicon Factory, and an increase in shutdown and maintenance. Recently, Yunnan issued a notice on the special rectification work plan for safety production, and silicon enterprises in Yunnan have been involved. The calcined coke market continued to decline; Carbon enterprises mainly purchase on demand, while the petroleum coke market continues to decline. Downstream enterprises have a strong wait-and-see mood, mainly consuming early inventory, and limited support for the local refining petroleum coke market.

According to petroleum coke analysts from Business News, the inventory of petroleum coke in domestic ports is currently at a high level for a long time, with a stable operation rate of delayed coking units in China, sufficient market supply, serious shortage of procurement at the downstream demand end, and oversupply in the market. In the near future, the situation of oversupply in the domestic market will continue; Local refining enterprises are facing difficulties in shipping, actively reducing prices to remove inventory, while downstream enterprises are cautious in purchasing, and lack enthusiasm for entering the market. It is expected that petroleum coke refining in the near future may decline slightly.

Aluminum price stops falling and stabilizes

According to data from Business News Agency, on March 27, 2023, the average price of domestic aluminum ingots in the East China market was 18416.67 yuan/ton, with a daily increase of 0.44%. Compared to the beginning of the month (March 1), the aluminum price was 18416.67 yuan/ton, which was flat. After recovering in January, aluminum prices fell in mid February. After the Federal Reserve raised interest rates in March, aluminum prices stopped falling and stabilized.

In the long term, the current price has retreated significantly, increasing by 5.54% compared to the recent recovery starting point (July 14, 2022), where the average market price of aluminum ingots was 17450 yuan/ton. The recent high aluminum price occurred on December 5th, with the average aluminum ingot market price of 19536.67 yuan/ton, a decrease of 5.73%.

Overview of fundamentals

1. High inventory levels showed month-on-month inventory removal performance

As of March 23, the domestic mainstream social inventory was 1.218 million tons, compared to 1.076 million tons of social inventory at the beginning of February (February 2), with a cumulative inventory of 142000 tons; Compared to the social inventory of 1427000 tons at the beginning of March (March 2), 209000 tons were removed from the warehouse.

2. Gradual digestion of macro pressure

With the relative decline of macro panic sentiment and the implementation of the Federal Reserve’s interest rate hike in March, macro negative factors in the early stage gradually digested.

3. List of import and export data

According to customs data, in January-February, China imported about 150000 tons of aluminum ingots, an increase of 92800 tons year-on-year. The total export of aluminum ingots was about 3700 tons, a year-on-year decrease of 27000.

4. Domestic supply side

Guangxi and Sichuan regions have a small amount of electrolytic aluminum production capacity, while Gansu, Guizhou, and Inner Mongolia have a small amount of new production capacity.

After three rounds of production restriction, the production capacity in Guizhou has decreased by 760000 tons compared to the end of November. A new round of production reduction in Yunnan has been in place, with a total reduction of about 780000 tons of production capacity until the end of the dry season in May.

Aftermarket forecast

From the perspective of supply side, recent production reductions in Yunnan-Guizhou region and inventory data show that the social inventory of electrolytic aluminum is still relatively high, but there is a trend of destocking. In the short term, electrolytic aluminum will be suppressed and alleviated by macro factors. It is expected that the aluminum price will stop falling and stabilize, and the future market will be dominated by strong shocks. In the near future, it is expected to wait and see the strength of downstream consumption.

Zinc prices fluctuated and consolidated this week

According to data monitoring by the Business News Agency, as of March 24th, the zinc price was 22506 yuan/ton, a slight increase of 0.18% compared to the fluctuation of 22466 yuan/ton on March 17th; Compared to the zinc price of 23346 yuan/ton on March 1, the decrease was 3.60%. Optimistic expectations of market demand coexisted with sluggish sentiment, and zinc prices fluctuated and consolidated this week.

Non ferrous metals confidence index

The confidence index of nonferrous metal enterprises in the first quarter of 2023 was 49.8, up 1.4 points from the previous quarter. The confidence index rebounded again after two consecutive quarters of decline, approaching the critical point of 50. In the first quarter of 2023, the confidence index of nonferrous metal enterprises showed a steady increase, but it has not fully recovered to above the critical point of 50. The overall operating environment of the industry and the restoration of enterprise confidence require a certain period of time. Limited support for zinc market gains.

Supply and demand of international zinc market

According to data released by the Kazakhstan Bureau of Statistics, Kazakhstan’s refined zinc production in January-February fell 14.2% year-on-year. The output of the international zinc market has decreased, the supply of zinc is insufficient, and the upward momentum of the zinc market has increased.

According to data released by the European Automobile Manufacturers Association, new car registrations increased by 12% in February to 902775 vehicles, the seventh consecutive month of growth. The increase in car registration and demand for zinc in the market has led to a strong upward momentum in zinc prices in the future.

US Treasury Secretary soothes the market, and the three major US stock indexes collectively closed higher

U.S. Treasury Secretary Janet Yellen plans to tell lawmakers at a congressional hearing on Thursday that the U.S. federal government will be prepared to take further measures to protect depositors’ deposits when necessary. Yellen has changed her mouth to appease the market. The three major indexes of U.S. stocks collectively closed higher, the Nasdaq Composite Index rose 1%, the price of short-term U.S. treasury bond bonds rose, crude oil futures fell 1%, and gold futures rose more than 2%. Stimulated by the positive news, the commodity market is expected to recover, with the London zinc price surging in the evening, and the upward momentum of the zinc market has increased.

Aftermarket Forecast

Data analysts from the Business News Agency believe that the demand in the international zinc market has rebounded and the supply has declined. The recent zinc market has some positive support, but the economic recovery is less than expected, with limited support for the rise of the zinc market. The US Treasury Secretary reassured the market that the commodity market was positive, but expectations of economic weakness remained, and support for zinc price increases was difficult to sustain. It is expected that the zinc market will fluctuate and consolidate in the future.

1、 Price trend

According to the monitoring data of the Business News Agency, the average factory price of domestic ammonium sulfate on March 17 was 1063 yuan/ton, and the average factory price of domestic ammonium sulfate on March 23 was 950 yuan/ton. This week, the price of ammonium sulfate fell 10.66%.

2、 Market analysis

The market price of ammonium sulfate fell sharply this week. At present, the market demand for ammonium sulfate continues to weaken, with a small amount of downstream purchases and weak new orders. The export performance of ammonium sulfate is poor, and the market situation is sluggish. This week, the bidding price of coking grade ammonium sulfate fell sharply, with domestic grade ammonium sulfate following the downward trend. As of March 23, the mainstream ex-factory quotation for coking grade ammonium sulfate in Shandong is around 870 yuan/ton. The mainstream ex-factory quotation for domestic ammonium sulfate in Shandong is 950-980 yuan/ton.

The price trend of downstream compound fertilizer is weak this week. The price of raw materials has declined, and the cost support for compound fertilizers has weakened. The industry is dominated by wait-and-see, with fewer transactions on the market and a light market atmosphere. It is expected that the compound fertilizer market will be weak in the short term.

3、 Aftermarket Forecast

According to ammonium sulfate analysts from the Business Agency, the domestic market for ammonium sulfate has continued to weaken recently, while the foreign market is still sluggish. Currently, the enthusiasm for downstream procurement is not high. Under the guidance of negative factors, it is expected that the ammonium sulfate market will continue to be weak in the short term, mainly due to consolidation and operation.